With the festive season round the corner in India and the federal government approving an increase in Goods and Services Tax (GST) cess for luxury cars and sport utility vehicles (SUVs), the sales of passenger vehicles surged 14% in August.
The GST Council has got the Indian Cabinet’s approval to hike the surcharge on luxury cars and SUVs by as much as 25% from the current 15%. The council is yet to decide when it will come into effect.
Market leader Maruti Suzuki (a unit of Japan’s Suzuki Motor Corporation) posted a double-digit growth with its compact segment boosting the sales.
It sold 151,270 units to dealers last month against 119,906 units in August last year. Sales of compact segment vehicles rose 62.4% to 74,012 units, while utility vehicle clocked growth of 27.6%, but the mini segment sales remained flat at 35,428 vehicles.
The country’s second largest car manufacturer Hyundai Motors India Ltd (a unit of South Korea’s Hyundai Motors) claimed its sales grew 9% in August to 47,103 vehicles from 43,201 units last year.
Sport utility vehicle major Mahindra and Mahindra (M&M), the third-biggest player, has reported sales growth of six per cent and sold 19,325 units in August against 18,246 last year.
Japanese car maker Honda saw a 24% increase in sales volume to 17,365 units in August against 13,941 last year. However, its Japanese peer Toyota has reported a 6% drop in August volume to 12,017 vehicles against 12,801 last year. Toyota has witnessed a jump in bookings for its utility vehicles after the announcement regarding GST hike.
The August passenger vehicle sales number also positively impacted the Indian bourses with the benchmark Sensex ending the week on Friday with a three-week high of 31,892.23 points.